A start-up aiming to solve issues around the lack of a consolidated tape for fixed income in Europe has more than 20 asset managers looking to join its data pooling network for bond traders.
Glimpse Markets founder and chief executive officer, Paul O’Brien, told The TRADE that 21 buy-side firms are going through the legal review process to sign up to the data sharing platform, with plans to go live in the fourth quarter this year.
“It’s a very simple ‘Give to Get’ model. Essentially, you need to have some skin in the game in order to get the aggregated data from everybody else for free, so the buy-side are incentivised to share their trading data,” O’Brien told The TRADE.
“We have tried to remove as many barriers to entry as possible both in terms of cost and ease of integration. Ultimately, this is data that buy-side traders don’t currently have access to and it’s in high demand because the composite pricing which many rely on today is merely an estimate of where the market is.
“The March and April market volatility this year also highlighted some of the limitations of composite and indicative pricing in that they’re not always a true reflection of where the market is. There really is no substitute for live traded prices for corporate bonds. That just doesn’t exist in Europe, and that’s the issue we are trying to address.”
The start-up is also independent and currently building out a buy-side advisory board for governance to provide input on strategy and direction, consisting of around eight to 10 heads of trading.
O’Brien is a veteran fixed income product manager, having recently served as head of buy-side solutions and fixed income electronic trading at the London Stock Exchange Group’s bond trading platform MTS for the past four years. He has also spent time during his career building out platforms for Algomi and Etrading Software.
Glimpse Markets is looking to provide traders in Europe with something equivalent to the TRACE system in the US. A consolidated tape for fixed income has been long-sought by bond traders in Europe, but with an equities tape yet to be established, it seems an unlikely development any time soon.
“There’s massive frustration in the industry due to the lack of any reliable post-trade data for corporate bonds in Europe,” O’Brien adds. “MiFID tried to address this issue, but their solution has fallen way short. Some post-trade information is made available, via APAs, but because such a small number of bonds are deemed liquid, the reality is the data is almost totally useless.”
Last year, the EU markets watchdog revived its efforts to establish a consolidated tape with the launch of an industry consultation. The consultation was focused on the development of a tape for equities, and it noted that implementing a tape for non-equity instruments will be more difficult. However, the consultation said potential providers should gain experience from developing an equities tape, which could then be deployed to the non-equity tape.